Hospital financial assistance policy and CHNA rules for marketing teams

A nonprofit hospital has two sets of documents that federal tax rules require it to put in front of the public: its financial assistance policy, and its community health needs assessment (CHNA) report. Both are tax compliance documents, written and adopted by finance, legal and community benefit teams. But the rules for getting them to the public read like a marketing brief: post them on the website, put signs in the emergency room, add a notice to every bill and reach the people in the community who are most likely to need help. Those channels belong to the marketing and web team.

This guide is for marketing, web and patient communication teams at tax-exempt hospitals and the agencies that work with them. It explains what Section 501(r) of the Internal Revenue Code and its regulations require you to publish, where and in what form. The other notices a hospital website must carry are covered in our guide to hospital marketing compliance, and the standard charges files in our guide to hospital price transparency requirements. We do not repeat them here. Free and charitable clinics describe no-cost care in their own way; see free clinic marketing.

Who the 501(r) rules cover

Section 501(r) was added by the Affordable Care Act. Under 26 U.S.C. 501(r)(2), it applies to an organization that operates a facility which a State requires to be licensed, registered or similarly recognized as a hospital, and to any other organization the Treasury determines has hospital care as its principal function or purpose for its exemption. Under 501(r)(1), such a hospital organization is not treated as a 501(c)(3) organization unless it meets four requirements: a community health needs assessment, a financial assistance policy, limits on charges, and billing and collection rules.

The requirements apply facility by facility. 501(r)(2)(B) says an organization with more than one hospital facility must meet them separately for each facility. The IRS page on these requirements adds that multiple buildings operated under a single state license are considered a single hospital facility, and that a failure to meet the requirements for one or more facilities “may result in revocation of the organization’s tax-exempt status.” It also notes that hospital organizations report on these policies on Form 990, Schedule H.

For a web team, facility by facility means each hospital in a system needs its own set of documents where the rules call for them, and the website has to make clear which policy and which CHNA report belong to which facility.

What the financial assistance policy must say

26 U.S.C. 501(r)(4)(A) requires a written financial assistance policy (FAP) that includes eligibility criteria and whether assistance includes free or discounted care, the basis for calculating amounts charged to patients, the method for applying, the actions the organization may take for non-payment if it has no separate billing and collections policy, and “measures to widely publicize the policy within the community to be served by the organization.” 501(r)(4)(B) adds a written policy requiring the organization to provide care for emergency medical conditions without discrimination, regardless of FAP eligibility.

The regulation fills in the detail. Under 26 CFR 1.501(r)-4(b)(1)(iii)(F), the FAP must include a list of any providers, other than the hospital facility itself, delivering emergency or other medically necessary care in the facility, specifying which are covered by the FAP and which are not. That list matters to marketing because it is the answer to a question patients ask: does the help apply to the doctors who treat me here, or only to the hospital bill?

Marketing does not write the FAP. What marketing does is publish it, summarize it and point people to it. Every summary, banner, web page and sign has to match the version the hospital has adopted, so set up a way to hear about each revision before it takes effect.

The four measures to widely publicize the policy

26 CFR 1.501(r)-4(b)(5)(i) spells out what widely publicizing the FAP means. A hospital facility must do all four of these:

1. Website. Make the FAP, the FAP application form and a plain language summary of the FAP widely available on a website, as defined in the regulations.
2. Paper copies. Make paper copies of all three available on request and without charge, both by mail and in public locations in the facility, including at a minimum the emergency room (if any) and admissions areas.
3. The community. Notify and inform members of the community served by the facility about the FAP “in a manner reasonably calculated to reach those members who are most likely to require financial assistance.”
4. Patients. Notify and inform patients by offering a paper copy of the plain language summary as part of intake or discharge, including a conspicuous written notice on billing statements, and setting up conspicuous public displays in public locations, including at a minimum the emergency room (if any) and admissions areas.

Under 1.501(r)-4(b)(5)(iii), a measure notifies and informs if it tells the reader or listener, at a minimum, that the facility offers financial assistance under a FAP and how or where to get more information and copies of the documents. Under (b)(5)(iv), whether a measure is reasonably calculated to reach people depends on the facts and circumstances, including the primary languages spoken in the community and other attributes of the community and the facility.

The regulation includes its own worked example. The hospital in Example 1 puts this message on its home page and main billing page: “Need help paying your bill? You may be eligible for financial assistance. Click here for more information.” It distributes the plain language summary and application form to referring staff physicians, community health centers, the local health department and public agencies and nonprofit organizations serving low-income populations, places an advertisement about financial assistance in every issue of the newsletter it mails to the individuals in its customer database, and puts a sign in large font in its admissions areas and emergency room with the web address, a phone number and a room number. The regulation says those measures meet the requirement. Read it as one example of what is enough, not the only way.

What a compliant web page looks like

“Widely available on a Web site” has a specific meaning in 26 CFR 1.501(r)-1(b)(29). The facility must conspicuously post a complete and current version of the document on its own website, on the hospital organization’s website if the facility has no separate site, or on another entity’s site if the hospital’s own site carries a conspicuously displayed link to it with clear instructions. People with internet access must be able to access, download, view and print a hard copy of the document:

• without special hardware or software, other than software that is readily available to the public without a fee;
• without paying a fee; and
• without creating an account or being otherwise required to provide personally identifiable information.

The facility must also give anyone who asks how to find the document online the direct web address of the page where it is posted.

Those conditions rule out several things that marketing sites do with other content. Do not put the FAP or the CHNA report behind a lead capture form, an email gate, a patient portal login or a chat window that asks for a name first. Do not let a site redesign move the documents without a redirect, because the web address is printed on bills and signs. If the documents are hosted by a vendor, keep a conspicuous link on the hospital’s own pages. Our guide to HIPAA and website contact forms covers what forms on a hospital site should and should not collect.

A short, stable address such as /financial-assistance/ for each facility, linked from the home page, the billing page, the footer and the pay your bill flow, makes the printed notices easier to keep accurate. Accessibility rules are separate from 501(r); our website accessibility guide covers the federal rules that apply to health care websites and documents.

The plain language summary is your core copy

Under 26 CFR 1.501(r)-1(b)(24), the plain language summary is a written statement that tells a person the facility offers financial assistance under a FAP and gives, “in language that is clear, concise, and easy to understand,” the following:

• a brief description of the eligibility requirements and assistance offered;
• a brief summary of how to apply;
• the direct web address and physical locations where the FAP and application form can be obtained;
• instructions for getting a free copy of the FAP and application form by mail;
• contact information, including a phone number and physical location, for the office that can provide information about the FAP, and for the office that helps with applications (or, if the facility does not help, at least one nonprofit organization or government agency it has identified as a source of help);
• a statement that translations are available, if applicable; and
• a statement that a FAP-eligible individual may not be charged more than amounts generally billed (AGB) for emergency or other medically necessary care.

That list is a ready outline for the financial assistance web page, a brochure and the intake handout. Keep the AGB statement in the words the hospital’s counsel approves, because it reflects 501(r)(5), which limits charges for emergency or other medically necessary care for FAP-eligible individuals to not more than the amounts generally billed to individuals who have insurance covering such care. Do not turn it into a price promise such as “no bill over” a figure.

Translations for limited English proficient groups

Under 26 CFR 1.501(r)-4(b)(5)(ii), widely publicizing the FAP includes accommodating all significant populations with limited English proficiency (LEP) by translating the FAP, the application form and the plain language summary into their primary languages. The regulation says a facility meets this in a taxable year if it makes translations available in the language of each LEP language group that constitutes the lesser of 1,000 individuals or 5 percent of the community served by the facility or the population likely to be affected or encountered by it, and that the facility may determine those numbers using any reasonable method.

For marketing, that means the translated versions are published with the same care as the English one: on the web page, at the signs and in the brochure racks. Put language links on the financial assistance page itself, not only in a site wide language switcher. The Section 1557 language assistance notice is a separate federal requirement covered in our hospital marketing compliance guide, and our Spanish-language marketing guide covers translation quality.

Bills, statements and collection notices

Billing statements are a regulated channel here. Under 26 CFR 1.501(r)-4(b)(5)(i)(D)(2), each billing statement needs a conspicuous written notice about the availability of financial assistance that includes the phone number of the office that can provide information about the FAP and the application process, and the direct web address where the FAP, application form and plain language summary can be obtained.

Before certain collection actions, the billing and collection rules add more. Under 26 CFR 1.501(r)-6(c)(4)(i), a facility has notified an individual about its FAP only if, at least 30 days before first initiating an extraordinary collection action, it provides a written notice that financial assistance is available for eligible individuals, identifies the actions it intends to take and states a deadline no earlier than 30 days after the notice; provides the plain language summary with that notice; and makes a reasonable effort to orally notify the individual about the FAP and how to get help applying. The IRS page on billing and collections summarizes the same rules.

Marketing and patient experience teams who redesign statements, payment reminder emails, text messages and online bill pay pages should treat the financial assistance notice as a fixed element: the same phone number and web address as the plain language summary, placed where the reader will see it, and checked whenever a template changes. The collection steps themselves belong to the revenue cycle and legal teams.

The CHNA report and implementation strategy

Under 26 U.S.C. 501(r)(3), a hospital organization must conduct a CHNA in the current taxable year or either of the 2 preceding taxable years, adopt an implementation strategy to meet the needs it identifies, take into account input from persons who represent the broad interests of the community served, and make the assessment widely available to the public. The IRS 501(r) page notes that the CHNA requirements apply to taxable years beginning after March 23, 2012.

Under 26 CFR 1.501(r)-3(b)(7)(i), the CHNA report is widely available only if the facility posts it on a website, as defined above, at least until it has posted its two subsequent CHNA reports, and makes a paper copy available for public inspection on request and without charge at the facility for the same period. That means a CHNA page with the current report and earlier reports kept online, not replaced. Under (b)(7)(ii), a version expressly marked as a draft on which the public may comment does not count as making the report widely available for the purpose of dating the CHNA.

Two more points connect to communications work:

• Community input. Under 1.501(r)-3(b)(5)(i), the facility must solicit and take into account input from at least one governmental public health department (or a State Office of Rural Health), from members of medically underserved, low-income and minority populations or those representing them, and written comments received on its most recent CHNA and implementation strategy. Make it easy to send those written comments: a clear address or form on the CHNA page that does not require more information than a comment needs.
• What the report must contain. Under 1.501(r)-3(b)(6)(i), the report defines the community served, describes the process and methods, describes how input was solicited, gives a prioritized description of significant health needs, describes the resources potentially available and evaluates the impact of actions taken since the prior CHNA. Community benefit stories in annual reports, newsletters and press releases should match what the adopted report and implementation strategy say.

Under 1.501(r)-3(c)(1), the implementation strategy is a written plan that, for each significant health need, either describes how the facility plans to address it or says the facility does not intend to address it and explains why. When marketing describes community programs, tie them to the needs and actions in that plan, and do not describe a need as addressed when the plan says it is not.

How this fits with price transparency and financing pages

A hospital’s billing section can carry several federally required items at once: the price transparency files and shoppable services display, the balance billing disclosure, the financial assistance documents and, for some patients, payment plans or third party financing. They answer different questions and are governed by different rules. Keep them as separate, clearly labeled pages linked from one billing hub, so that a patient looking for help paying finds the financial assistance page before a financing offer. Our guides to hospital price transparency and advertising patient financing cover those pages.

Illustration: rewriting a hospital billing page

Illustration only, not a real hospital. A billing page reads: “Pay your bill online in seconds. Questions? Fill out our contact form and we will get back to you. Ask about our flexible financing options.” The financial assistance policy is a PDF linked from the footer of a separate About page, and the link asks for a name and email before the download starts. A rewrite in line with the sources above would put, near the top of the page:

• “Need help paying your bill? You may be eligible for financial assistance. [Link to the financial assistance page]”
• On the financial assistance page: the plain language summary, links to download the policy, the application form and the summary with no sign-in and no form, links to each translated version, and how to get free paper copies by mail or at [location].
• “Questions about financial assistance or help applying: call [phone number] or visit [office and room].”
• The provider list from the policy, linked from the same page, so patients can see which providers in the facility are covered.
• Financing options, if offered, on their own page linked below the financial assistance information.

Checklist

• Get each adopted FAP, application form, plain language summary and CHNA report from the team that owns it, with the effective date.
• Publish each document on a stable page for each facility, with no form, login, fee or special software.
• Link the financial assistance page from the home page, the billing page, bill pay and the footer.
• Publish the translated versions next to the English ones.
• Use one phone number and web address across the summary, bills, signs and web page.
• Keep the financial assistance notice on every billing statement template and check it after each change.
• Supply signs and plain language summaries for the emergency room and admissions areas.
• Plan outreach to the community members most likely to need assistance, and record what was done.
• Keep the current CHNA report and the earlier reports online for as long as the rules require.
• Give the public a simple way to send written comments on the CHNA and implementation strategy.
• Match community benefit content to the adopted CHNA report and implementation strategy.

For statements, billing texts, collection agencies and state medical debt reporting laws, see our medical debt collection rules guide.

How we help

We build websites, local search and Google Ads for health care organizations, and we plan required documents, stable addresses and redirects into every build so a redesign does not break the links printed on bills and signs. See our medical website design work. Our AI front desk is built with HIPAA in mind and can point callers and site visitors to the financial assistance page and the office that helps with applications, using wording your team approves. We confirm in writing what a BAA covers before any patient information flows through a tool, and if it is not covered, we do not route patient information through it. We do not sell lead lists and do not pay for referrals. For the wider set of rules we follow, see our healthcare marketing rules hub.

Sources

• 26 U.S.C. 501: Exemption from tax on corporations, certain trusts, etc. (subsection (r))
• 26 CFR 1.501(r)-1: Definitions (paragraphs (b)(24) and (b)(29))
• 26 CFR 1.501(r)-3: Community health needs assessments
• 26 CFR 1.501(r)-4: Financial assistance policy and emergency medical care policy (paragraph (b)(5))
• 26 CFR 1.501(r)-6: Billing and collection (paragraph (c)(4))
• IRS: Requirements for 501(c)(3) hospitals under the Affordable Care Act, Section 501(r)
• IRS: Community Health Needs Assessment for Charitable Hospital Organizations, Section 501(r)(3)
• IRS: Financial Assistance Policies (FAPs)
• IRS: Billing and Collections, Section 501(r)(6)

More in Prices, payment and billing notices